PLN urged to accelerate 10,000 MW power project

Jakarta (ANTARA News) - The government has urged state-owned power company PT PLN to accelerate the construction of the first phase of the 10,000 MW power development program.

The director general of electricity of the ministry of energy and mineral resources, Jarman, said here on Thursday the acceleration was needed to reduce electricity subsidy set at Rp88 trillion in the revised 2012 budget.

"We wish PLN could speed up the 10,000 MW project. The faster, the better to reduce the subsidy," he said.

Jarman admitted the obstacles in the field faced by PLN which could not be overcome easily.

He said according to plans in 2012, 3,000 MW of the 10,000 MW projects were expected to finish and so accumulatively 6,100 MW would have been finished.

"The projects which have finished are PLTU Lontar Unit 2 and 3 and Paiton," he said.

Jarman said he hoped gas supply to the floating storage and regasification unit (FSRU) could be sped up to reduce the use of oil.

Right now only PLTGU Muara Karang and PLTGU Tanjung Priok power plants in Java that are still using oil as their source of energy.

"Meanwhile other planst such as Tambak Lorok, Grati and Gresik that have already used natural gas," he said.

He said he would maintain gasoline consumption in 2012 at 7.4 million kilo liters as set in the revised 2012 budget.

With the consumption of oil set at 7.4 million kilo liters oil contribution in power plants would decline to 13 percent from 22 percent. "Next year we will reduce it further to reach nine percent," he said.

Jarman said with the subsidy allocation at Rp88 trillion PLN`s capacity to pay its debt would be safe namely at a minimum of 1.5 times. "It is safe. All its investments will continue," he said.

The government is monitoring possible electricity subsidy hike due to the increasing crude price.

"The budget assumption is only US$105 per barrel but the price could possibly rise," he said.(T.K007/Uu.H-YH/B003)